Regarding the Acquisition of Musical.ly by ByteDance Ltd.

[Federal Register Volume 85, Number 161 (Wednesday, August 19, 2020)]

[Presidential Documents]

[Pages 51297-51299]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2020-18360]

Presidential Documents

Federal Register / Vol. 85, No. 161 / Wednesday, August 19, 2020 /

Presidential Documents

[[Page 51297]]

Order of August 14, 2020

Regarding the Acquisition of Musical.ly by

ByteDance Ltd.

By the authority vested in me as President by the

Constitution and the laws of the United States of

America, including section 721 of the Defense

Production Act of 1950, as amended (section 721), 50

U.S.C. 4565, it is hereby ordered as follows:

Section 1. Findings. (a) There is credible evidence

that leads me to believe that ByteDance Ltd., an

exempted company with limited liability incorporated

under the laws of the Cayman Islands (``ByteDance''),

through acquiring all interests in musical.ly, an

exempted company with limited liability incorporated

under the laws of the Cayman Islands (``Musical.ly''),

might take action that threatens to impair the national

security of the United States. As a result of the

acquisition, ByteDance merged its TikTok application

with Musical.ly's social media application and created

a single integrated social media application; and

er the laws of the Cayman Islands (``Musical.ly''),

might take action that threatens to impair the national

security of the United States. As a result of the

acquisition, ByteDance merged its TikTok application

with Musical.ly's social media application and created

a single integrated social media application; and

(b) Provisions of law, other than section 721 and

the International Emergency Economic Powers Act (50

U.S.C. 1701 et seq.), do not, in my judgment, provide

adequate and appropriate authority for me to protect

the national security in this matter.

Sec. 2. Actions Ordered and Authorized. On the basis of

the findings set forth in section 1 of this order,

considering the factors described in subsection (f) of

section 721, as appropriate, and pursuant to my

authority under applicable law, including section 721,

I hereby order that:

(a) The transaction resulting in the acquisition by

ByteDance of Musical.ly, to the extent that Musical.ly

or any of its assets is used in furtherance or support

of, or relating to, Musical.ly's activities in

interstate commerce in the United States (``Musical.ly

in the United States''), is hereby prohibited, and

ownership by ByteDance of any interest in Musical.ly in

the United States, whether effected directly or

indirectly through ByteDance, or through ByteDance's

subsidiaries, affiliates, or Chinese shareholders, is

also prohibited.

tates (``Musical.ly

in the United States''), is hereby prohibited, and

ownership by ByteDance of any interest in Musical.ly in

the United States, whether effected directly or

indirectly through ByteDance, or through ByteDance's

subsidiaries, affiliates, or Chinese shareholders, is

also prohibited.

(b) In order to effectuate this order, not later

than 90 days after the date of this order, unless such

date is extended for a period not to exceed 30 days, on

such written conditions as the Committee on Foreign

Investment in the United States (CFIUS) may impose,

ByteDance, its subsidiaries, affiliates, and Chinese

shareholders, shall divest all interests and rights in:

(i) any tangible or intangible assets or property, wherever located, used

to enable or support ByteDance's operation of the TikTok application in the

United States, as determined by the Committee; and

(ii) any data obtained or derived from TikTok application or Musical.ly

application users in the United States. Immediately upon divestment,

ByteDance shall certify in writing to CFIUS that all steps necessary to

fully and permanently effectuate the actions required under sections 2(a)

and 2(b) have been completed.

(c) Immediately upon divestment, ByteDance shall

certify in writing to CFIUS that it has destroyed all

data that it is required to divest pursuant to section

2(b)(ii), as well as all copies of such data wherever

located, and CFIUS is authorized to require auditing of

ByteDance on terms it deems appropriate in order to

ensure that such destruction of data is complete.

fy in writing to CFIUS that it has destroyed all

data that it is required to divest pursuant to section

2(b)(ii), as well as all copies of such data wherever

located, and CFIUS is authorized to require auditing of

ByteDance on terms it deems appropriate in order to

ensure that such destruction of data is complete.

(d) ByteDance shall not complete a sale or transfer

under section 2(b) to any third party:

[[Page 51298]]

(i) until ByteDance notifies CFIUS in writing of the intended recipient or

buyer; and

(ii) unless 10 business days have passed from the notification in section

2(d)(i) and CFIUS has not issued an objection to ByteDance. Among the

factors CFIUS may consider in reviewing the proposed sale or transfer are

whether the buyer or transferee: is a U.S. citizen or is owned by U.S.

citizens; has or has had a direct or indirect contractual, financial,

familial, employment, or other close and continuous relationship with

ByteDance, or its officers, employees, or shareholders; and can demonstrate

a willingness and ability to support compliance with this order. In

addition, CFIUS may consider whether the proposed sale or transfer would

threaten to impair the national security of the United States or undermine

the purpose of this order, and whether the sale effectuates, to CFIUS's

satisfaction and in its discretion, a complete divestment of all tangible

or intangible assets or property, wherever located, used to enable or

support the operation of the TikTok application in the United States.

he proposed sale or transfer would

threaten to impair the national security of the United States or undermine

the purpose of this order, and whether the sale effectuates, to CFIUS's

satisfaction and in its discretion, a complete divestment of all tangible

or intangible assets or property, wherever located, used to enable or

support the operation of the TikTok application in the United States.

(e) From the date of this order until ByteDance

provides a certification of divestment to CFIUS

pursuant to section 2(b), ByteDance and TikTok Inc., a

Delaware corporation, shall certify to CFIUS on a

weekly basis that they are in compliance with this

order and include a description of efforts to divest

the interests and rights described in section 2(b) and

a timeline for projected completion of remaining

actions.

(f) Any transaction or other device entered into or

employed for the purpose of, or with the effect of,

evading or circumventing this order is prohibited.

(g) Without limitation on the exercise of authority

by any agency under other provisions of law, and until

such time as the divestment is completed and verified

to the satisfaction of CFIUS, CFIUS is authorized to

implement measures it deems necessary and appropriate

to verify compliance with this order and to ensure that

the operations of the TikTok application are carried

out in such a manner as to ensure protection of the

national security interests of the United States

o the satisfaction of CFIUS, CFIUS is authorized to

implement measures it deems necessary and appropriate

to verify compliance with this order and to ensure that

the operations of the TikTok application are carried

out in such a manner as to ensure protection of the

national security interests of the United States. Such

measures may include the following: on reasonable

notice to ByteDance and TikTok Inc., employees of the

United States Government, as designated by CFIUS, shall

be permitted access, for purposes of verifying

compliance with this order, to all premises and

facilities of ByteDance and TikTok Inc., and any of

their respective subsidiaries, operated in furtherance

of the TikTok application located in the United States:

(i) to inspect and copy any books, ledgers, accounts, correspondence,

memoranda, and other records and documents in the possession or under the

control of ByteDance or TikTok Inc., or any of their respective

subsidiaries, that concern any matter relating to this order;

(ii) to inspect or audit any information systems, networks, hardware,

software, data, communications, or property in the possession or under the

control of ByteDance or TikTok Inc., or any of their respective

subsidiaries; and

(iii) to interview officers, employees, or agents of ByteDance or TikTok

Inc., or any of their respective subsidiaries, concerning any matter

relating to this order. CFIUS shall conclude its verification procedures

within 90 days after the certification of divestment is provided to CFIUS

pursuant to subsection (b) of this section.

or TikTok Inc., or any of their respective

subsidiaries; and

(iii) to interview officers, employees, or agents of ByteDance or TikTok

Inc., or any of their respective subsidiaries, concerning any matter

relating to this order. CFIUS shall conclude its verification procedures

within 90 days after the certification of divestment is provided to CFIUS

pursuant to subsection (b) of this section.

(h) If any provision of this order, or the

application of any provision to any person or

circumstances, is held to be invalid, the remainder of

this order and the application of its other provisions

to any other persons or circumstances shall not be

affected thereby. If any provision of this order, or

the application of any provision to any person of

circumstances, is held to be invalid because of the

lack of certain procedural requirements, the relevant

executive branch officials shall implement those

procedural requirements.

[[Page 51299]]

(i) The Attorney General is authorized to take any

steps necessary to enforce this order.

Sec. 3. Reservation. I hereby reserve my authority to

issue further orders with respect to ByteDance,

Musical.ly, Musical.ly in the United States, and TikTok

Inc. as shall in my judgment be necessary to protect

the national security.

Sec. 4. Publication and Transmittal. (a) This order

shall be published in the Federal Register.

eserve my authority to

issue further orders with respect to ByteDance,

Musical.ly, Musical.ly in the United States, and TikTok

Inc. as shall in my judgment be necessary to protect

the national security.

Sec. 4. Publication and Transmittal. (a) This order

shall be published in the Federal Register.

(b) I hereby direct the Secretary of the Treasury

to transmit a copy of this order to the appropriate

parties named in section 1 of this order.

(Presidential Sig.)

THE WHITE HOUSE,

August 14, 2020.

[FR Doc. 2020-18360

Filed 8-18-20; 11:15 am]

Billing code 3295-F0-P